EdgePoint Go West Portfolio
A concentrated portfolio that seeks to provide capital appreciation through investments in Western Canada, primarily in energy companies.
The opportunity
We launched Go West on November 22, 2019, against the backdrop of Canadian oil & gas being one of the most out-of-favour industries in the world.
Over our many years of investing, such negative sentiment starts becoming the underpinnings for longer-term value creation if the investments can overcome the reasons for falling out of favour in the first place.
We launched this Portfolio because it was an asset class where we saw an investment opportunity for our money but have no intention of running an energy portfolio indefinitely.
We also believed there was a positive ESG story to the Canadian energy industry that, unfortunately, is only becoming apparent today.
Our commitment to you is that when we no longer see this as an opportunity, we will take our capital and return yours as well at the same time.
We’re hopeful that it will be after substantial capital returns.
Below you'll find our thoughts over the last few years as this space continues to evolve.
Commentaries
No more room on the ark
On October 1, 2021, at a price of $15.72 per unit, we capped the Go West Portfolio to purchases from new investors. When we launched the Fund a year and a half earlier at $10 per unit, we asked our investment partners to follow us into the abyss and invest along side us in what we believed was an undervalued and very unloved sector. We didn’t take a management fee and we only get paid after an investor takes their money back, with a profit of course.
It’s a gratifying feeling to invest side-by-side with investors in such a unique one-off and non-perpetual opportunity like this Go West Portfolio. But with the Portfolio’s investment results up 57% on October 1, 2021, new investors would be coming in much higher than where we invested our own money.i There’s a point where we’re no longer investing side-by-side and destined for the same investment experience. We think we’ve crossed that point on October 1, 2021 at $15.72 per unit. That’s why we capped the Fund to new investors. Existing unitholders of the Fund can continue to add at their leisure (let's call that the fringe benefits of following us into the abyss). Our success will never be determined by assets under management.
We promised this would never be a permanent fund and that our money will stay invested until we close the Fund and give everyone’s money back. This now becomes our challenge to determine that time, that valuation, that moment before everything starts falling apart. This is never easy and we don't intend (or believe) we're skilled enough to time the top. With multiples this low, combined with the discipline and hurdles around growing production we’re still happily long this beautiful industry we owe so much to, but who we must soon transition from.
EdgePoint Go West Portfolio, Series W
Annualized total return, net of fees, performance in C$ as at January 31, 2024. YTD: 4.59%; 1-year: 12.99%; 3-year: 54.03% since inception (Nov. 22, 2019 to September 30, 2023): 32.91%.
i As at September 30, 2021. The Portfolio’s closing price was $15.72 compared to the initial price of $10.00 at its November 22, 2019 inception. We chose to compare against the inception date because a significant number of units were purchased by internal EdgePoint partners on this date.
Asset type
Energy allocation
Market capitalization
Portfolio Characteristics
As at December 31, 2023
Risk profile - Based on EdgePoint's assessment of risk, future anticipated investments and returns, and not on a historical standard deviation methodology.
†Weighted average in C$, excluding fixed income and cash.
What were they thinking?
We often get asked what was going through our minds when launching Go West, and wanted to share the reasoning behind why we believed the opportunity existed.
Take a trip down memory lane with the original EdgePoint Go West Portfolio presentation from 2019.